Exit Interview: Kevin Hagen, REI

Exit Interview: Kevin Hagen, REI

Exit Interview is an occasional series profiling sustainability professionals who recently have left their job.

Kevin Hagen served as director of corporate social responsibility at Recreational Equipment, Inc., better known as REI, the 75-year-old outdoor retailer and the U.S.'s largest consumer co-op, from 2005 until leaving the company in February. During that time, he had the opportunity to watch the company grow by nearly half — from $1.3 billion in annual sales and 3.3 million active members to $1.8 billion and nearly 5 million members.

Also during that time, REI developed its first comprehensive environmental program, engaging with its suppliers, competitors and others to address a wide range of operational and product-related issues.

I recently spoke with Hagen about his years at REI, and what he learned about making change happen. The following has been edited for clarity and length.

Joel Makower: What was your responsibility at REI?

Kevin Hagen: I had a wonderful job. I was responsible for helping set up and execute the first real corporate social responsibility program at the co-op. That’s not to say that the co-op wasn’t involved in a lot of really good work for a very long time, but as the outgoing CEO, Sally Jewell, once said, we kind of made a conscious switch from random acts of greenness to an organized approach to sustainable business. And I had the wonderful opportunity to kind of arrive right at that moment to design that program and help lead it across the organization.

Makower: So is your job focused more internally or was it focused on supply chain or was it focused on product design? Where did spend your time?

Hagen: The whole portfolio was the big picture ­— the strategic positioning of how and where REI should be focused. It started with some consultants, Brian and Mary Nattrass, who came to REI before I did — in 2005 or so — and started getting the organization thinking about a systemic way of looking at the world through the sustainability point of view.

I picked up those pieces, helped the organization get our arms around all of the things that should be important to us. It was really about how to look across the organization for opportunities and risks that we might not have seen before because we were looking at things in a more conventional way.

Makower: What was driving REI’s need to step up its game?

Hagen: I think REI really cares and really wants to make a difference. People worked for the co-op because they want to work for something bigger than themselves. They want to be involved in something big, and they were the first ones to feel when they saw a gap between how we wanted to behave and what was actually happening in the world.

So employees were the a primary driver early on. After that, it became the members. REI is a co-op, and so the almost 5 million members of the co-op were a driver. And then it was various other constituencies — the communities in which REI operates, various advocacy organizations, and other companies in the space.

REI as a retailer has a kind of unusual space. As opposed to a brand, which has got a single identity, REI as a retailer represents all of the companies in the outdoor industry. And so I had a wonderful position of being the nexus, the hub of where everything came together between the consumer and the outdoor enthusiasts, and almost all the brands in the industry. They all go through REI at some point.

Makower: One of the things that strikes me about the sector is how much cooperation and collaboration exists — through the Outdoor Industries Association and the Sustainable Apparel Coalition, among others. I’m curious on your view of how effectively that collaboration has been.

Hagen: Collaboration is an excellent litmus test in my opinion, for how advanced or how sophisticated a company’s sustainability efforts are. I think there’s a lot of work that has to be done inside of an organization to be credible — to learn, to figure things out, to be walking the talk, if you will. But ultimately, what most organizations have discovered is that the problems and challenges and the opportunities are really too big for any one company to deal with, even if you’re Walmart, for example.

And so it really comes to collaboration as the mechanism by which some of the biggest things are being dealt with. The outdoor industry is an absolute model of that activity. Perhaps it’s because the industry is small enough, or it may be because the industry has a lot in common, all the outdoors folks and all the ways that people know each other off work. The environment of collaboration among outdoor companies has always been strong — competitive, of course, but always collaborative.

Makower: Do you think maybe it had something to do with the fact that your sector has to do with sports and teams and mountain climbing and even ultimate Frisbee, or other things where people play together and cooperate, and that creates a more participatory and collaborative environment?

Hagen: Maybe there’s something to that. I think there’s also something to the fact that the companies in the room had already worked on sustainability things for a long time. Patagonia had years and years of effort. Timberland, years of work. Nike, years of work. I think most of those companies really knew the problems, knew the challenges, but were also at that point starting to really see the opportunities: how product could be better, how we didn’t have to accept tradeoffs. We could make things better, cheaper, faster if we made them right in the first place.

And I think that they started to realize that we could work together. And they saw that the supply chain was so big that none of us was going to be able to influence the cotton supply chain by ourselves, or the polyester supply chain, or the chemistry supply chain. So we needed to work together in order to get where we wanted to go.

Makower: What worked at REI in terms of things that you were able to do, and the things you learned along the way. Can you name a project that was particularly successful and impactful?

Hagen: I think real work started to happen when we got organized. We realized we required some frameworks — what became now the Higg Index out of the Sustainable Apparel Coalition, which has a set of lenses on environmental and social issues. That came from looking at the whole waterfront of this issue. How do we avoid unintended consequences by making sure we’re seeing everything?

The first step was having a framework-based approach. I came away with five or six key things from that. The first one was that our intuition was almost always wrong. Every time we expected this or that to be the big thing, and when we really got to doing the homework, we found that there were other things that mattered more. So, for example, I thought the shipping was going to be a big part of our carbon footprint. Well, it was, but employee commuting turned out to be even bigger.

I wasn’t expecting that. Now in retrospect, of course, it makes perfect sense. But it wasn’t obvious at first. I think the lesson out of that is that we’re all conventional thinkers to start with, and our intuition of business is based on conventional thinking. Very frequently, our intuition isn’t right, so we have to think in new ways through sustainability frameworks to be able to see the opportunities.

The second thing I found was that metrics matter. Since our intuition couldn’t be trusted, we had to be able to measure things better. So getting organizational metrics on environmental characteristics helped drive our work.

Makower: What did you learn about how to assess the progress you were making?

Hagen: I came to appreciate the difference between incremental improvement and groundbreaking improvement. A lot of folks talk about incremental improvements as being not good enough, because slowing down the car on its way toward the cliff — from Bill McDonough’s metaphor — isn’t the right approach.

However, by working on incremental improvements, we train the organization in new ways. We learn new skills, new competencies, and that opened our eyes to breakthrough opportunities as we started working on a new aspect — say, energy efficiency — and started making improvements. But then we realized that we could actually do things completely differently, like power the store from solar, and that was a breakthrough kind of thing.

So I think that incremental improvements are really important, even if they’re not sufficient, because they set the organization up for understanding what real breakthroughs might be.

Makower: So, what's next for you?

Hagen: I'm not sure yet. So far, it involves a lot of skiing at Whistler.